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Welcome back. Netflix shares higher today following news that bill Ackman is back in the name, years after exiting a stake in disgust and with a sizable loss. We're covering that news along with what some are calling a major overhaul of his Pershing square portfolio. First to Julia boorstin on Mr. Ackman's Netflix sequel.
Hi, Julia. Hi, Scott. Well, bill Ackman sees a new opportunity in Netflix now, even with today's move higher on his buying into the stock, Netflix shares have fallen 36% in the past year, Ackman saying he thinks Netflix has won the streaming wars, saying, quote, we believe the company's current valuation multiple represents a substantial discount for business.
With such a strong growth profile and dominant market position. Now, Ackman first bought shares of Netflix back in 2022, but then he sold after three months when the company reported its first subscriber loss in a decade. He took a reported $400 million loss on that sale. Now, back then, he said, quote, we have lost confidence in our ability to predict the company's future prospects with a sufficient degree of certainty.
Now buying on that dip now. Ackman's new $3 million stake represents about 5% of Pershing square's portfolio. Scott. Yeah it's a really interesting story. 3 million shares back in the name Julia thanks so much. That's Julia boorstin. Now to those other moves that Mr. Ackman has revealed in his latest investor letter.
Leslie picker with that story for us in what we've said, what some are calling an overhaul of his portfolio, Leslie, as we learn about these new positions and others that he's added this year. Yeah, I think an overhaul makes sense. He runs a really concentrated portfolio. And in addition to Netflix now taking five other new positions since the firm's ipo Visa, Mastercard and S&P global, each comprising between 5% and 6% of the portfolio, plus intercontinental exchange and Alcon.
In a letter, he frames Visa and Mastercard as a bet that stablecoins and agentic agentic commerce are opportunities, not threats. Similarly, he thinks the market is overindexing ai disintermediation fears at S&P global and ice. And he says recent fears around perpetual futures and what they mean for ice are overblown.
Lastly, he writes that the ophthalmology company Alcon can expand margins, particularly in contact lenses, as it, quote, continues to season its manufacturing platforms. Pershing square's usa net asset value performance from the ipo through the end of Q2 declined more than 8%, compared with a 5% gain in the S&P over the same time period.
But the firm did say that the portfolio substantially recovered once they were nearly fully invested, although it still trades at a very stubborn, steep discount to nav. Scott. It definitely does. Leslie, thank you very much for that look. That's Leslie picker. For more on the Netflix position, here's shareholder Kevin Simpson of capital wealth planning.
So it's good to have you back. I'm wondering what you make of this sequel as we've called it today. Yeah. I think the Pershing square performance numbers are going to be much improved in large part because of Netflix. Scott. This isn't the Netflix that that bill Ackman sold four years ago. This is the Netflix that the company has become.
And I think that the streaming wars have been won. I totally agree with the note. And if you look at the subscribers, 325 million subscribers is more than Disney, it's more than HBO, it's more than max all combined. So I think there's a lot to like here. Now, I don't want to lose sight of the fact that the stock's down almost 40%.
It's down for a reason. There's a lot of things that Netflix needs to get right. I think they sat on their laurels a little bit. Maybe the content has suffered maybe more than just a little bit, but there's a lot of things that they can do with improved margins, improve content, live sports advertising.
This is a setup here that I think is very undervalued. If you look at where it was trading just recently before the decline, you had a 40pe, everything had to go right for Netflix. It didn't. And that's why the P E now I think a forward around 2021 is very, very valuable. And I really like the stock down here, Scott.
I mean, when you say that this is not the same company that he sold after three months back in 2022. Others may agree with you. They would only say it looks potentially weaker today than it did even then. How would you respond to that? Yeah, I don't agree with that. I think if you compare Netflix of 2026 versus 2022, back in 2022, you didn't know that they were going to be the dominant player.
You didn't realize that they were going to have the massive win that they did. Again, this is not a perfect story. You've got not just the competitive streamers, but you've got all of the social media you're competing with and you're competing with YouTube. So there's a lot to criticize here. But from a valuation standpoint, I think that's the the part that I would really lean into in defense of the company from a bullish stance down here.
Scott. Do they need to do some kind of deal. I mean that's what got this stock moving lower in the first place. All the talk around wbd and they didn't get it. And all I heard at that point was that was so good for the stock that they didn't do it. And now we've heard them talk about the possibility of other transactions.
I'm wondering as the shareholder, what do you want them to do? I would love to have seen those those properties under the Netflix umbrella. So I'm sad that that initial acquisition didn't take place. I think you're talking about what you and I have spoken about on the desk before, which is NBC universal.
Yes, there's content there, but I think more in terms of the live sports and then ultimately how that rolls into advertising for them, hypothetically. But it really comes down to, you know, how much do you want to open the checkbook? There's tons of free cash flow here. They can certainly afford an acquisition of that magnitude.
I think it would fit perfectly in where they're trying to go. Because if you think about it, live sports is the one thing that streaming didn't have before. Must see television. You know, we're not going to sit around and watch a Yankees game or an Orioles game three months into the future and have kind of the same enthusiasm behind it.
They've broken into the NFL. They've got some things going with the MLB. We know what they do with the wwemma. I think if they could get NBC universal or something like that with a bigger NFL package and introduce NBA into the mix, it could take their advertising to another level. But it really comes down to fiscal
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